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How a family office should invest is often taken as a question about asset allocation. But the family’s culture is equally as — if not more — important.

The head of a family office that serves several Middle Eastern families who have been working together for more than a century, recently told me that family members have two options of what to do with their money.

First, they can invest it in the families’ operating businesses, with a bit of private equity thrown in; or second, add it to a pool of broadly based liquid marketable securities.

Typically, the family members invest in both and are able to decide how much they place in each. The effect is to “prioritise the long term over the short term, a unity of interests over individual choice and simplicity over complexity”, according to the family office head.

The family’s philosophy is, he continued, very distinct from the “individualistic” ethos behind the typical American family office investment strategy. This raises the interesting question of whether culture influences family office strategy.

It is true that many American family offices tend to offer individually tailored investment portfolios, and that German ones are often more conservative.

Also, many people who work with wealthy Southeast Asian families say that they are often dominated by patriarchs, who make decisions that they believe are best for the family. “They listen; then do what they want,” is the usual response.

However, is this a cultural difference? There are patriarchs the world round and questions of succession are often clouded by the reluctance of the founder to step back and let the next generation make their mark. These are questions better related to the age of the family enterprise. As families become multi-generational, their aims and needs become more varied and taking account of different opinions becomes critical to the overall business.

Far more influential than the culture or the country in which the family office is based, is the family’s own culture, which can be influenced by, for instance, how long they have been wealthy.

More and more families are turning to written constitutions

Those who have inherited money tend to be more aware of its responsibilities. They are “born as investors”, one Swiss banker told me.

Growing up with an understanding of your place within the family firm will always have a great impact on your eventual investment decisions. Longevity is critical.

The oft-quoted statistic of most family fortunes dissipating by the third generation is more keenly felt by entrepreneurs with an eye on ensuring their wealth survives not only them but also their grandchildren.

With this in mind, more and more families are turning to written constitutions. Establishing what the business stands for and how the family members can tap into this will allow a greater sense of cohesion. Culture, in this instance, acts as glue, drawing the disparate family elements together.

Constitutions or family charters are no easy route. Most take two years to draw up — and sometimes longer to implement.

But this is one of the most important steps: it acts as a benchmark to which the family can refer.

One of the main reasons family enterprises break down is that their interests diverge to such an extent that the different parties no longer feel that they have any common project.

As WB Yeats wrote: “Things fall apart; the centre cannot hold.”

A written constitution is an effective means of keeping the centre together. The family’s cultural background or baggage may not influence investment decisions, but determining the reason behind the business ultimately will.